- Phase IIa clinical trial for IW-9179 in gastroparesis expected to
initiate by year end 2014 -

CAMBRIDGE, Mass.--(BUSINESS WIRE)--
Ironwood
Pharmaceuticals, Inc. (NASDAQ: IRWD) today provided an update on its
third quarter 2014 and recent business activities. The company continued
to grow sales of LINZESS, advance its pipeline of investigational
medicines for gastrointestinal (GI) disorders, and manage expenses.

"During the third quarter, we made significant progress across all
aspects of our business. With continued strong prescription demand, we
now expect the LINZESS brand to be profitable going forward and to
deliver significant cash flows to the company into at least 2031," said
Peter Hecht, chief executive officer of Ironwood. "We also continue to
advance our innovative pipeline and by the end of 2014 expect to have
four mid- to late-stage linaclotide clinical trials ongoing with our
partners and two wholly-owned programs in ongoing mid-stage clinical
trials, with important data readouts beginning early next year."

Third Quarter 2014 and Recent Highlights

LINZESS® (linaclotide)

LINZESS U.S. net product sales, as provided by Actavis plc, were $79.7
million in the third quarter of 2014, an increase of approximately 27%
quarter over quarter. There was an approximately $8 million
unfavorable impact to U.S. net sales as a result of a change in
accounting methodology following the integration of Forest
Laboratories, Inc. into Actavis, and a decrease in wholesaler
inventory levels during the quarter. Details include:

Gross-to-net adjustments for the third quarter of 2014 were
approximately 30% as compared to approximately 23% in the second
quarter of 2014. Beginning in the third quarter of 2014, certain
costs related to LINZESS co-pay assistance programs, such as the
LINZESS Instant Savings Program, are being recognized as
gross-to-net adjustments in conformity with Actavis's accounting
methodology. Prior to the third quarter of 2014, these costs were
recorded as sales and marketing expenses.

Wholesaler inventory levels at the end of the third quarter
decreased half a week from the end of the second quarter to the
lower end of the two to three week range. Wholesaler inventory
levels are expected to be in the two to three week range going
forward.

Effective July 1, 2014, Ironwood and Actavis increased the
wholesale acquisition cost of LINZESS by 9.5% to its current price
of $8.43 per capsule.

Approximately 400,000 total LINZESS prescriptions were filled in the
third quarter of 2014, an increase of approximately 22% quarter over
quarter, and over 1.5 million LINZESS prescriptions have been filled
since the product's launch in December 2012, according to IMS Health.

More than 70% of people with commercial insurance or Medicare Part D
plans had unrestricted access to LINZESS as of September 2014.
Additionally, as of September 2014, approximately 75% of people with
commercial insurance had a co-pay of $30 or less for LINZESS, through
formulary coverage or the LINZESS Instant Savings Program.

More than 95,000 healthcare practitioners have prescribed LINZESS to
more than 440,000 unique patients since the product's launch,
according to IMS Health.

Research & Development

Ironwood and Actavis continue to evaluate opportunities to strengthen
linaclotide's clinical utility in its indicated population, as well as
expand linaclotide into additional approved indications, populations
and formulations. The companies initiated two clinical trials in
support of this strategy:

A randomized, double-blind, placebo-controlled Phase III clinical
trial assessing the efficacy and safety of linaclotide in a
once-daily 72 mcg dose in adult patients with chronic idiopathic
constipation (CIC). If approved, the 72 mcg dose and the currently
approved 145 mcg dose would provide a broader range of treatment
options to physicians and the up to 35 million adult patients in
the U.S. suffering from CIC. Data from this trial are expected in
2016.

A randomized, double-blind, placebo-controlled Phase II clinical
trial evaluating linaclotide for the treatment of adults suffering
from opioid-induced constipation (OIC). It is estimated that more
than 8 million people in the U.S. suffer from OIC. Data from this
trial are expected in the second half of 2015.

Ironwood continued to leverage its GI and guanylate cyclase expertise
to advance its pipeline of product candidates designed to address
unmet needs across the upper and lower GI tract. Additionally,
Ironwood is investigating multiple candidates within its soluble
guanylate cyclase (sGC) program. Development highlights during the
third quarter and recent period include:

Completed enrollment in a Phase IIa clinical study evaluating
IW‐3718, an investigational gastric retentive bile acid
sequestrant for adults with gastroesophageal reflux disease (GERD)
symptoms who have not responded adequately to treatment with a
proton pump inhibitor (PPI). There are an estimated 7 million
Americans who suffer from symptoms of GERD despite treatment with
a PPI, the current standard of care. Data from this trial are
expected in early 2015.

Filed an investigational new drug application with the U.S. Food
and Drug Administration for IW-9179, a guanylate cyclase-C (GC-C)
agonist designed to target the upper GI tract. In the fourth
quarter of 2014, the company plans to initiate a Phase IIa
clinical study evaluating the ability of IW-9179 to provide relief
of gastroparesis symptoms. Gastroparesis is an upper GI disorder
that affects an estimated 9 million Americans and is characterized
by nausea, vomiting, bloating, early satiety and pain. Data from
this trial are expected in the first half of 2016.

Continued to advance the sGC program targeting multiple severe
cardiovascular diseases. As part of these efforts, Ironwood
expects to advance its first sGC candidate, IW-1973, into clinical
development early in the first half of 2015.

Global Partnerships for Linaclotide

Astellas Pharma Inc. initiated a double-blind, randomized,
placebo-controlled Phase III clinical trial of linaclotide in adult
patients with irritable bowel syndrome with constipation (IBS-C) in
Japan, with patient enrollment expected to begin in the coming weeks.
Under the terms of Ironwood's license agreement with Astellas,
Ironwood will earn a $15 million development milestone payment upon
enrollment of the first patient. Astellas expects to complete the
Phase III trial in 2016. In addition, Astellas now plans to expand its
development of linaclotide in Japan and is entering into a Phase II
clinical trial with linaclotide in adults with chronic constipation.

Ironwood and AstraZeneca AB continue to enroll patients in a Phase III
clinical trial of linaclotide in adults with IBS-C for China. Data
from this trial are now expected in the second half of 2015 and, if
approved by the China Food and Drug Administration, the companies
anticipate that linaclotide could be commercialized in China in 2017.

Almirall, S.A. continues to commercialize CONSTELLA® in Europe, where
it is approved for adult patients with moderate to severe IBS-C and is
available in 10 European countries, including the United Kingdom,
Italy and Spain.

Corporate and Financials

Collaborative Arrangements Revenue. Collaborative arrangements
revenue was approximately $16.9 million in the third quarter of 2014
compared with approximately $6.8 million in the second quarter of
2014. Revenue consisted of $13.5 million in revenue associated with
Ironwood's share of the net profits and losses from the sales of
LINZESS in the U.S., as well as $3.4 million related to the
amortization of deferred revenue associated with consideration
received from Ironwood's collaboration with Astellas, revenue
recognized in connection with the collaboration with AstraZeneca, and
royalty payments based on sales of linaclotide in other territories
outside of the U.S.

Operating Expenses. Operating expenses were approximately $53.6
million in the third quarter of 2014, as compared to approximately
$51.4 million in the second quarter of 2014. Operating expenses
consisted of approximately $25.1 million in research and development
(R&D) expenses, which included $2.2 million in non-cash share-based
compensation expense, and approximately $28.5 million in selling,
general and administrative (SG&A) expenses, which included $3.4
million in non-cash share-based compensation expense.

Interest Expense. Interest expense was approximately $5.3
million in the third quarter of 2014 in connection with the $175
million debt financing executed in January 2013.

Net Loss. Net loss was approximately $42.0 million, or $0.30
per share, in the third quarter of 2014, as compared to approximately
$60.4 million, or $0.44 per share, in the second quarter of 2014.

Cash Position. Ironwood ended the third quarter of 2014 with
approximately $265 million of cash, cash equivalents and
available-for-sale securities. Ironwood used approximately $39 million
of cash for operations during the third quarter of 2014, as compared
to approximately $36 million in the second quarter of 2014.

Total operating expenses are now expected to be in the lower end
of the previously-guided range of $215 million to $245 million.
This guidance is based upon the Company's expectation of $105
million to $120 million in R&D expenses and $110 million to $125
million in SG&A expenses, both of which are expected to be in the
lower end of their ranges. Non-linaclotide R&D expenses are
expected to be approximately 45% of total R&D expenses.

In addition, Ironwood now expects its combined Actavis and
Ironwood total 2014 marketing and sales expenses for LINZESS to be
in the lower to mid-range of the previously-guided $240 million to
$270 million.

Conference Call Information

Ironwood will host a conference call and webcast at 4:30 p.m. Eastern
Time, on Tuesday, November 4, to discuss its third quarter 2014 and
recent business activities. Individuals interested in participating in
the call should dial (877) 643-7155(U.S. and Canada) or (914)
495-8552 (international) using conference ID number 19055251. To access
the webcast, please visit the Investors section of Ironwood's website at www.ironwoodpharma.com
at least 15 minutes prior to the start of the call to ensure adequate
time for any software downloads that may be required. The call will be
available for replay via telephone starting at approximately 7:30 p.m.
Eastern Time, on November 4, running through 11:59 p.m. Eastern Time on
November 11, 2014. To listen to the replay, dial (855) 859-2056 (U.S.
and Canada) or (404) 537-3406 (international) using conference ID number
19055251. The archived webcast will be available on Ironwood's website
for 14 days beginning approximately one hour after the call has
completed.

About LINZESS (linaclotide)

LINZESS® is the first and only guanylate cyclase-C (GC-C) agonist
approved by the FDA and is indicated for the treatment of both irritable
bowel syndrome with constipation (IBS-C) and chronic idiopathic
constipation (CIC) in adults. LINZESS is a once-daily capsule that helps
relieve the abdominal pain and constipation associated with IBS-C, as
well as the constipation, infrequent stools, hard stools and incomplete
evacuation associated with CIC. The recommended dose is 290 mcg for
IBS-C patients and 145 mcg for CIC patients. LINZESS should be taken at
least 30 minutes before the first meal of the day.

LINZESS is thought to work in two ways based on nonclinical studies.
LINZESS binds to the GC-C receptor locally, within the intestinal
epithelium. Activation of GC-C results in increased intestinal fluid
secretion and accelerated transit and a decrease in the activity of
pain-sensing nerves in the intestine. The clinical relevance of the
effect on pain fibers, which is based on nonclinical studies, has not
been established.

In placebo-controlled Phase III clinical trials of more than 2,800
adults, LINZESS was shown to reduce abdominal pain in IBS-C patients and
increase bowel movement frequency in both IBS-C patients and CIC
patients. Improvement in abdominal pain and constipation occurred in the
first week of treatment and was maintained throughout the 12-week
treatment period. Maximum effect on abdominal pain was seen at weeks 6-9
and maximum effect on constipation occurred during the first week. When
a subset of LINZESS-treated patients in the trials were switched to
placebo, they reported their symptoms returned toward pretreatment
levels within one week, while placebo-treated patients switched to
LINZESS reported symptom improvements. LINZESS is contraindicated in
pediatric patients under 6 years of age. The use of LINZESS in pediatric
patients 6 through 17 years of age should be avoided. In nonclinical
studies, administration of a single, clinically relevant adult oral dose
of linaclotide caused deaths due to dehydration in young juvenile mice.
The safety and efficacy of LINZESS in pediatric patients under 18 years
of age have not been established. In adults with IBS-C or CIC treated
with LINZESS, the most commonly reported adverse event was diarrhea.

Ironwood and Actavis plc are co-promoting LINZESS in the United States.
Linaclotide is marketed by Almirall, S.A. for the treatment of adults
with moderate to severe IBS-C in Europe under the brand name CONSTELLA®.
Ironwood also has partnered with Astellas Pharma Inc. for development
and commercialization of linaclotide in Japan and with AstraZeneca AB
for development and commercialization in China.

About CONSTELLA (linaclotide)

Linaclotide is a guanylate cyclase-C receptor agonist (GCCA) with
visceral analgesic and secretory activities. Linaclotide is a 14-amino
acid synthetic peptide structurally related to the endogenous guanylin
peptide family. Both linaclotide and its active metabolite bind to the
guanylate cyclase-C receptor, on the luminal surface of the intestinal
epithelium. Through its action at GC-C, linaclotide has been shown to
reduce visceral pain and increase GI transit in animal models and
increase colonic transit in humans. Activation of GC-C results in an
increase in concentrations of cyclic guanosine monophosphate (cGMP),
both extracellularly and intracellularly. Extracellular cGMP decreases
pain-fiber activity, resulting in reduced visceral pain in animal
models. Intracellular cGMP causes secretion of chloride and bicarbonate
into the intestinal lumen, through activation of the cystic fibrosis
transmembrane conductance regulator (CFTR), which results in increased
intestinal fluid and accelerated transit.

Linaclotide was discovered by scientists at Ironwood and is marketed by
Almirall, S.A. for the treatment of adults with moderate to severe IBS-C
in Europe under the brand name CONSTELLA, through a license agreement
between the two companies.

About Ironwood Pharmaceuticals

Ironwood Pharmaceuticals (NASDAQ: IRWD) is focused on creating medicines
that make a difference for patients, building value to earn the
continued support of our fellow shareholders, and empowering our team to
passionately pursue excellence. We discovered, developed and are
commercializing linaclotide, which is approved in the United States and
a number of other countries. Our pipeline priorities include exploring
further opportunities for linaclotide, as well as leveraging our
therapeutic expertise in gastrointestinal disorders and our
pharmacologic expertise in guanylate cyclases to address patient needs
across the upper and lower gastrointestinal tract. Ironwood was founded
in 1998 and is headquartered in Cambridge, Mass. Connect with us at www.ironwoodpharma.com
or on Twitter at www.twitter.com/ironwoodpharma;
information that may be important to investors will be routinely posted
in both these locations.

LINZESS® and CONSTELLA® are trademarks owned by Ironwood
Pharmaceuticals, Inc. Any other trademarks referred to in this press
release are the property of their respective owners. All rights reserved.

Important Safety Information

WARNING: PEDIATRIC RISK

LINZESS is contraindicated in pediatric patients under 6 years
of age. In nonclinical studies, administration of a single,
clinically relevant adult oral dose of linaclotide caused deaths
due to dehydration in young juvenile mice. Use of LINZESS should
be avoided in pediatric patients 6 through 17 years of age. The
safety and efficacy of LINZESS has not been established in
pediatric patients under 18 years of age.

Contraindications

LINZESS is contraindicated in pediatric patients under 6 years of age.

LINZESS is contraindicated in patients with known or suspected
mechanical gastrointestinal obstruction.

Warnings and Precautions

Pediatric Risk

LINZESS is contraindicated in children under 6 years of age. The
safety and effectiveness of LINZESS in pediatric patients under 18
years of age have not been established. In neonatal mice, increased
fluid secretion as a consequence of GC-C agonism resulted in mortality
within the first 24 hours due to dehydration. Due to increased
intestinal expression of GC-C, children under 6 years of age may be
more likely than older children and adults to develop significant
diarrhea and its potentially serious consequences.

Use of LINZESS should be avoided in pediatric patients 6 through 17
years of age. Although there were no deaths in older juvenile mice,
given the deaths in young juvenile mice and the lack of clinical
safety and efficacy data in pediatric patients, use of LINZESS should
be avoided in pediatric patients 6 through 17 years of age.

Diarrhea

Diarrhea was the most common adverse reaction of LINZESS-treated
patients in the pooled IBS-C and CIC double-blind placebo-controlled
trials. Severe diarrhea was reported in 2% of LINZESS-treated
patients. The incidence of diarrhea was similar in the IBS-C and CIC
populations.

Patients should be instructed to stop LINZESS if severe diarrhea
occurs and to contact their healthcare provider. The healthcare
provider should consider dose suspension and rehydration.

This press release contains forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, including, but not limited to, statements about our
development and commercialization plans for linaclotide, our product
candidates and the programs in our pipeline, including statements
regarding our LINZESS® patient awareness campaign and its impact; the
launch and commercialization of linaclotide in additional countries and
the timing thereof; market size, growth and opportunity, and potential
demand for linaclotide and our product candidates, as well as their
potential impact on applicable markets; the potential indications for,
and benefits of, linaclotide and our product candidates; the anticipated
timing of pre-clinical and clinical developments; the design, timing and
results of clinical and pre-clinical trials; the expected period of
patent exclusivity; the strength of the intellectual property protection
for our product and product candidates; LINZESS profitability and the
timing thereof; inventory levels and gross-to-net adjustments and their
impact on LINZESS net sales; milestone payments and the timing thereof;
and our company's financial performance and results and guidance related
thereto, including our projected 2014 operating expenses (including
certain research and development expenses and selling, general and
administrative expenses), cash flows, cash burn, and marketing and sales
expense for LINZESS. Each forward‐looking statement is subject to risks
and uncertainties that could cause actual results to differ materially
from those expressed or implied in such statement. Applicable risks and
uncertainties include, but are not limited to, those related to
pre-clinical and clinical development, manufacturing, and formulation
development; decisions made by regulatory authorities; decisions made by
the U.S. Patent and Trademark Office and its foreign counterparts;
intellectual property rights of competitors or potential competitors;
efficacy, safety and tolerability of linaclotide and our product
candidates; competition in disease states; the commercial potential of
linaclotide and our product candidates; the risk that we may never get
sufficient patent protection for linaclotide and our product candidates;
the risk that our planned investments do not have the anticipated effect
on our company revenues, linaclotide or our product candidates; the risk
that we are unable to manage our operating expenses over the year due to
foreseeable or unforeseeable events or occurrences; the risk that we and
our partner, Actavis plc, are unable to commercialize LINZESS within the
guided range of expenses; and the risks presented by future business
decisions made by us, our partners and our competitors or potential
competitors. Applicable risks also include those that are listed under
the heading "Risk Factors" and elsewhere in Ironwood's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2014, in addition to the
risk factors that are listed from time to time in Ironwood's Annual
Reports on Form 10‐K, Quarterly Reports on Form 10‐Q and any other
subsequent SEC filings. Ironwood undertakes no obligation to update
these forward-looking statements to reflect events or circumstances
occurring after this press release. Except as otherwise noted, these
forward-looking statements speak only as of the date of this press
release. All forward‐looking statements are qualified in their entirety
by this cautionary statement.

Condensed Consolidated Balance Sheets

(In thousands)

(unaudited)

September 30,2014

December 31,2013

Assets

Cash, cash equivalents and available-for-sale securities

$

264,961

$

197,602

Accounts receivable, net

14,686

3,213

Inventory

13,045

22,145

Prepaid expenses and other current assets

11,389

6,168

Total current assets

304,081

229,128

Property and equipment, net

30,415

37,376

Other assets

11,672

12,458

Total assets

$

346,168

$

278,962

Liabilities and Stockholders' Equity

Accounts payable and accrued expenses

$

35,042

$

32,037

Current portion of capital lease obligations

1,128

1,139

Current portion of deferred rent

3,466

2,790

Current portion of deferred revenue

5,074

5,074

Current portion of long-term debt

9,347

—

Total current liabilities

54,057

41,040

Capital lease obligations

2,868

3,134

Deferred rent

8,091

8,822

Deferred revenue

7,610

11,416

Notes payable

165,392

174,672

Other liabilities

—

1,653

Total stockholders' equity

108,150

38,225

Total liabilities and stockholders' equity

$

346,168

$

278,962

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2014

2013

2014

2013

Collaborative Arrangements Revenue

$

16,918

$

4,932

$

38,363

$

17,850

Cost and expenses:

Cost of revenue

—

2,021

12,442

6,670

Research and development (1)

25,122

23,016

74,408

79,862

Selling, general and administrative (1)

28,535

30,264

87,758

94,508

Collaboration expense

—

6,182

—

42,074

Total cost and expenses

53,657

61,483

174,608

223,114

Loss from operations

(36,739

)

(56,551

)

(136,245

)

(205,264

)

Other expense

(5,249

)

(5,224

)

(15,726

)

(15,562

)

Net loss

$

(41,988

)

$

(61,775

)

$

(151,971

)

$

(220,826

)

Net loss per share—basic and diluted

$

(0.30

)

$

(0.51

)

$

(1.12

)

$

(1.93

)

Weighted average number of common shares used in net loss per share
—basic and diluted

139,234

120,769

135,799

114,141

(1) Non-cash compensation expenses reflected in the condensed
consolidated statements of operations are as follows:

Research and development

$

2,151

$

2,349

$

7,112

$

7,274

Selling, general and administrative

$

3,385

$

2,850

$

10,510

$

8,017

LINZESS U.S. Collaboration Revenue/Expense Calculation1

(in thousands)

(unaudited)

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2014

2013

2014

2013

LINZESS U.S. net sales

$

79,670

$

34,444

$

203,228

$

67,709

Commercial costs and expenses2

69,024

63,276

208,364

201,945

Net profit (loss) on sales of LINZESS

$

10,646

$

(28,832

)

$

(5,136

)

$

(134,236

)

Ironwood's share of net profit (loss)

$

5,323

$

(14,416

)

$

(2,568

)

$

(67,118

)

Ironwood's selling, general and administrative expenses3

$

8,187

$

8,234

$

23,992

$

25,044

Profit share adjustment4

$

—

$

—

$

2,311

$

—

Ironwood's collaborative arrangement revenue (expense)

$

13,510

$

(6,182

)

$

23,735

$

(42,074

)

1 Ironwood collaborates with Actavis on the development and
commercialization of linaclotide in North America. Under the terms of
the collaboration agreement, Ironwood receives 50% of the net profits
and bears 50% of the net losses from the commercial sale of LINZESS in
the U.S. The purpose of this table is to present calculations of
Ironwood's share of net profit (loss) generated from the sales of
LINZESS in the U.S. and Ironwood's collaboration revenue/expense;
however, the table does not present the research and development
expenses related to LINZESS in the U.S. that are shared equally between
the parties under the collaboration agreement.2
Includes cost of goods sold incurred by Actavis as well as selling,
general and administrative expenses incurred by Actavis and Ironwood
that are attributable to the cost-sharing arrangement between the
parties.3 Includes Ironwood's selling, general and
administrative expenses attributable to the cost-sharing arrangement
with Actavis.4 Ironwood or Actavis may incur additional
expenses related to certain contractual obligations, resulting in an
adjustment to the company's share of the net profits as stipulated by
the collaboration agreement.